Beyond Meat (BYND 3.02%) had plenty of momentum during its early days of a three-year global partnership with McDonald's (MCD 0.67%), signed in February 2021. Demand for meat alternatives was growing at a clip of over 20% a year. Furthermore, initial analysis found that several of the original eight McDonald's test locations were selling as many as 500 McPlant sandwiches a week, or about 70 per day -- well above the 20 to 25 sandwiches a day projected. 

A person enjoys a hamburger and a milkshake.

Image source: Getty Images.

This was enough evidence for McDonald's to expand its test to 600 stores in early 2022. Since then, however, the McPlant has fallen well below expectations. BTIG analyst Peter Saleh reported the sandwich was selling 30% below projections in some markets. 

More recently, an analyst with JP Morgan noted the product had been removed from several restaurants due to low sales. 

McDonald's Isn't the Only Challenge for Beyond Meat

Because of McDonald's ubiquitous U.S. presence, the end of this test has significant implications for the plant-based category overall and could hinder consumer access to the product, which would impact long-term growth potential. It's not the only concern for Beyond Meat, however. When the company signed its three-year global partnership with McDonald's, it also signed a similar deal with global giant Yum! Brands (YUM 1.38%), the parent company of KFC, Taco Bell, and Pizza Hut.

KFC seems to have had some success with its Beyond Fried Chicken product, brought back in January for a limited time after generating record-setting media impressions for the company. The company has yet to add it as a permanent menu item, however.

Taco Bell's carne asada test with Beyond Meat still hasn't materialized after over a year, while Pizza Hut and Beyond Meat launched the Beyond Italian Sausage Pizza and Great Beyond Pizza in November, though they are no longer available. There have been rumors that Beyond has struggled to get the pepperoni formula right.

In other words, we're nearly halfway through these three-year agreements between McDonald's and Beyond Meat, and between Yum! Brands and Beyond Meat, and there are no permanent menu items to show for it. Meanwhile, the demand for plant-based meat remains elevated, proving this wasn't a knee-jerk trend created by the Covid-19 pandemic.

This could mean that either Beyond Meat's products aren't resonating, or that consumers are ready and willing to pay for meat alternatives but perhaps not from their favorite and familiar quick-service restaurant brands.

Either way, the McDonald's news could dampen long-term potential for Beyond. It could also have category-wide implications and even delay initial public offering (IPO) plans for Beyond competitor Impossible Foods.

Beyond will report second-quarter earnings on Aug. 4.